Challenges facing the accounting industry revealed

There are several key trends set to impact HR professionals and leaders within the accounting industry, a new report by Xero has revealed.

Accounting software company Xero has released its State of the industry report, analysing trends in the accounting and bookkeeping industry.

Challenges facing accounting

According to Xero, talent shortages are having a major impact on hiring for accounting firms. The biggest HR challenge facing businesses at the moment is hiring experienced staff, with 38 per cent of respondents citing it as their number one issue.

To combat this, companies are offering benefits to help attract staff and keep current employees around. Forty per cent of organisations are offering benefits, such as flexible hours. This was equal with providing learning and development.

Meanwhile, 35 per cent are offering hybrid or remote working, and 33 per cent are focusing on the wellbeing of employees.

Xero noted that hybrid working is the future, and organisations need to address this in order to stay ahead. Eighty-three per cent of firms surveyed offer hybrid or remote working options. However, being fully remote is not very common, with only 6 per cent of workers not coming onsite at all.

Fortuna Advisory Group founder and managing director Dinesh Aggarwal said that embracing flexibility is key to continued growth.

“Many people are looking for hybrid or remote options now. And because we’re open to this, we’ve seen an increase in workforce availability, with talent from our local area and beyond,” said Mr Aggarwal.

Outsourcing may be beneficial to organisations looking to secure talent.

“There’s been a big ideology shift when it comes to outsourcing. It’s no longer considered a standalone entity but part of a holistic recruitment strategy encompassing in-house, remote and global staff. This approach can unlock huge potential from a capacity and growth perspective when demand and supply balance out,” Mr Aggarwal explained.

Economic uncertainty

The state of the economy was another key concern of respondents, as pressure from clients grows. Fifty-six per cent expect clients will require more support if the economy deteriorates, and 43 per cent believe some of their clients could close business.

In response to economic trouble, 45 per cent said they would need to increase service fees, while 44 per cent believe they would have to raise staff wages, too, as the cost of living climbs. A further 31 per cent said they’d likely reduce staff numbers, and just 20 per cent aren’t concerned about economic instability.

RSM Australia’s national head of business advisory, Dace Harris, commented: “No one has a crystal ball, but challenges are certainly on the horizon. Our job is to help clients make rational decisions when they’re in an emotional headspace. And we do this by turning to the data.”

Business advisory manager at RSM Australia, Steven Cuffe, agrees that data is what will help organisations to prevail.

“Although digital tools are far more sophisticated nowadays, advisors have always relied on data — which isn’t the case for many small businesses,” he said.

“So with uncertainty comes this heightened need to automate, pooling as much data as possible. Why? Because this gives clients the ability to make decisions based on facts rather than emotion.”

Benefits of digitisation

Xero said that digitisation is the future of accounting, especially through apps.

Apps are used for a variety of processes, according to respondents. Thirty-eight per cent use them for document management, 36 per cent for client reporting and data, and 33 per cent for compliance.

Larger organisations are utilising apps more than smaller ones, the report found, noting that 35 per cent of firms with revenue under $100,000 use apps to assist, whereas 98 per cent of companies with over $2 million in revenue are doing the same.

Seventy-nine per cent of respondents said that some or most clients expect more from them now than they did during the pandemic. With this in mind, businesses may benefit by implementing some of the strategies posed by Xero, such as greater flexibility, increased digitisation, and use of data.

To read the full State of the industry report, click here.